Cryptocurrencies and digital assets are involved in cybercrime cases in three main ways: as payment a scheme collects, as property someone takes, or as a way to move money from a crime. Cryptocurrency in cybercrime cases can lead to Kansas charges, federal charges, or both.
Digital assets reach beyond Bitcoin to include stablecoins (coins tied to a steady value like the U.S. dollar), NFTs (non-fungible tokens), exchange account balances, and private keys (the secret codes that control a wallet).
Kansas Charges in a Cryptocurrency Case
Kansas can charge a digital asset case under K.S.A. 21-5839, the state’s computer crime statute. Conduct the law covers includes:
- Unauthorized access: Accessing a computer, network, or any other property without permission and then damaging, copying, or taking it.
- Fraud schemes: Using a computer to defraud someone or to obtain money or property through lies or misrepresentations.
- Exceeding authorized access: Going beyond the access you were given and then damaging, copying, or taking a computer, network, or other property.
Because the statute reaches “any other property,” it covers digital assets themselves, not just computers. It also applies to hacking, phishing, and data theft in Kansas that never involves cryptocurrency.
Each type of conduct above is a severity level 8 felony, rising to level 5 when the victim’s loss is more than $100,000. Kansas ranks most felonies from level 1, the most serious, to level 10, the least serious. Under Kansas’s sentencing grid, that level and a person’s criminal history set the sentencing range and whether the presumed sentence is probation or prison.
Which Federal Charges Involve Cryptocurrency?
Federal laws that can apply to digital asset cases include:
- Computer Fraud and Abuse Act: 18 U.S.C. § 1030 covers unauthorized access to protected computers (any computer used in or affecting interstate commerce).
- Money laundering: 18 U.S.C. § 1956 covers transactions designed to hide the source, ownership, or control of money from certain crimes. That can include mixing services, which pool and shuffle coins.
- Unlicensed money transmitting: 18 U.S.C. § 1960 makes it a crime to run an unlicensed money transmitting business.
For that charge, 2019 virtual currency guidance from the Financial Crimes Enforcement Network treats a business that exchanges virtual currency for others as a money transmitter, but not someone who simply buys things with cryptocurrency.
Forfeiture Can Reach Cryptocurrency Tied to a Case
Forfeiture means the government takes ownership of property connected to a crime. After a conviction for money laundering or running an unlicensed money transmitting business, the federal criminal forfeiture statute requires forfeiture of any property involved in the offense or traceable to it. Traceability matters for digital assets because blockchain transfers are recorded, which lets investigators follow coins from one wallet to the next.
Can You Be Charged in a Kansas County Where You Have Never Been?
Yes. For crimes committed with an electronic device, Kansas lets prosecutors file charges outside the county where the accused person was. Under K.S.A. 22-2619, the case can be filed in any county where:
- Any act required to commit the crime took place
- The victim lives or was located at the time of the crime
- The property involved was obtained, or someone tried to obtain it
What a Cryptocurrency Investigation Can Involve
Exchanges that operate as money transmitters must keep customer records and report suspicious activity, so an exchange account can leave a detailed paper trail. Agents in federal white collar investigations often collect documents and trace money before contacting anyone, so significant evidence may already exist by then.
Talk With a Defense Lawyer About Cryptocurrency in Cybercrime Cases
Finding out that your wallet, exchange account, or devices are part of an investigation can be unsettling. Our attorneys can advise you on whether to speak with investigators, whether to leave funds where they are, and how to preserve account records and transaction history.
At Henderson Legal Defense, we offer a free consultation about cryptocurrency in cybercrime cases in Kansas and federal court. You can contact us or call (913) 782-4030.